Höfner and Elser v Macrotron GmbH

The concept of an undertaking covers every entity engaged in an economic activity, regardless of its legal status and the way in which it is financed, so a public employment agency could be an undertaking.

Citation
Case C-41/90, [1991] ECR I-1979
Court
Court of Justice of the European Union
Year
1991
Subject
Competition Law
Topic
Undertakings, agreements and concerted practices

Facts

Under German law, the Federal Employment Office had a monopoly on employment placement, including the recruitment of business executives. Two recruitment consultants, Mr Höfner and Mr Elser, found a candidate for a sales director post with a company, Macrotron, which then refused to pay their fees, arguing that the contract was void because it breached the statutory monopoly. The consultants argued that the monopoly was contrary to the competition rules of the EEC Treaty.

Legal principle

The Court of Justice held that, in the context of competition law, the concept of an undertaking encompasses every entity engaged in an economic activity, regardless of the legal status of the entity and the way in which it is financed. Employment procurement is an economic activity, which has not always been carried out by public entities, so the public employment agency was an undertaking. A member state which granted such an agency an exclusive right, in circumstances where the agency was manifestly incapable of satisfying demand for executive recruitment, would breach the Treaty by creating a situation in which the agency would inevitably abuse its dominant position.

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